This is a rush transcript of "Special Report With Bret Baier" from June 2, 2010. This copy may not be in its final form and may be updated.

(BEGIN VIDEO CLIP)

PRESIDENT OBAMA: Right now, stopping this oil spill and containing the damage is necessarily the top priority, not just of my administration, but I think of the entire country. And we're waging this battle every minute of every day.

ALLEN: The cleaner the cut, the tighter the seal we can make on it. Partially through that cut, the saw got stuck, not unlike if you were sawing through a piece of wood and every once in a while it binds up.

(END VIDEO CLIP)

BRET BAIER, "SPECIAL REPORT" HOST: OK, you're looking live in the Gulf. We don't know what we're looking at there, but apparently they're saying that the saw is now freed from that pipe and they're back at it according to a BP spokesman. Don't see it working but we are told it is.

What about all of this? And the president speaking in Pennsylvania today, linking the oil spill to political action on his energy plan and Senate bill for comprehensive energy reform. Let's bring in the panel, Bill Kristol, editor of The Weekly Standard, Mara Liasson, national political correspondent of National Public Radio, and syndicated columnist Charles Krauthammer. Mara, first to you. The speech today in Pittsburgh, he really went after it hard and it was very political at points.

MARA LIASSON, NATIONAL POLITICAL CORRESPONDENT, NATIONAL PUBLIC RADIO: The president is in political mode. The election is only a couple months away. He is trying to draw a contrast between himself and his party and the Republicans.

He did wait until the end to talk about the energy bill. But I do think that is part of the political solution for him with this oil spill. Donald Rumsfeld famously said if you have a problem and it's hard to solve, make it bigger. He needs to make this bigger and link the oil spill to his push for clean energy.

BAIER: Even as he is getting a lot of criticism, Bill, about how he is responding to all of this, and even the images of him acting or not acting throughout this entire thing.

BILL KRISTOL, EDITOR, THE WEEKLY STANDARD: Mara said the election is a couple of months away. It's about five months away.

It was a weird speech today. He is entitled to give a big picture speech on his economic agenda, but I think he spent four sentences on the oil spill. But I do think, honestly, if you are in the middle of the crisis, he called at it catastrophe, the country expects you to take a few paragraphs to update people on where it stands and what you're doing.

Instead he slid over that and attacked Republicans for disagreeing with him on economic policy for a while. And so I think it's odd for him to say it's consuming every minute of every day, it's our number one priority, but I'm not going to talk about at it the major speech at Carnegie Mellon University.

BAIER: Is there a messaging issue coming from the White House on the oil spill?

KRAUTHAMMER: The main problem is any discussion of the spill itself is a loser because the president is helpless. Obviously, we're all watching it and it's out of control. So he wants to distract.

Yesterday we had the criminal investigation, or perhaps it was on Monday, which was a distraction. It actually cost — it took billions of dollars off the value of all the oil companies on the market. It caused a pretty big decline in the markets. But it had the political purpose of distracting attention from what you can't do, which is control the spill to what you can do, which is to make a political propaganda out of prospective trials.

Here what he is trying to do is to distract by going to another issue, a larger issue, and I think it's a real issue, which is what he wants to have as a carbon tax.

Now, he is a little late on the idea of taxing particularly oil and petroleum. I proposed it 30 years ago. Others have been at this for decades, Tom Friedman. It has been around ever since the early 1980s.

The distinction is on the conservative side, we have been advocating an oil tax because oil is a national security issue. It's also an economic issue. We're sending billions of dollars abroad to people like Venezuela, Russia, Saudi Arabia, unsavory ex-allies or adversaries who export all of this oil.

And if you tax it, we'd have less consumption and it would be a national security plus.

He wants to tax carbon, which means they want to include coal, of which we are the Saudi Arabia of the world, we do not import it. We have an abundance of it. And it's not going to help us on global warming. The Chinese have said they are going to be opening a new coal-fired plant every week for the next ten years, so it will be a transfer of wealth out of our treasury into China's.

And that I think is the big distinction on the issue.

BAIER: Is there a sense, Mara, that this is somehow getting him votes in the Senate on this energy legislation?

LIASSON: Look, the energy legislation had a political calculation behind it that was that it's going to include an expansion of offshore drilling. That is going to get you Republican votes. The oil spill put an end to the political equation. Lindsey Graham also dropped off negotiations.

But what Charles brings up is a pretty interesting point about the spill — if you conceive of it as a climate bill, you are going to want to make carbon more expensive. If you conceive of it as an energy bill and freeing the United States from dependence on foreign sources of industry, then you look at it in a different way.

BAIER: Weeks ago this thing was dead.

LIASSON: I think it can be revived. I think the president has to not just say he wants it and say oh, I'm going to look for votes but really make it a high priority.

I don't know what other option he has right now. Talking about the spill, as Charles says, might be a loser, but he can't avoid the spill, he can't distance himself from it. This is a fact of life and it's going to be a fact of life every day on television with those murky photos through August.

KRISTOL: But are they really doing everything? I'm not convinced of that. The liberal criticism of Obama by Maureen Dowd and Frank Rich is kind of idiotic, too. He's supposed to be more empathetic. That's not the point. The point is, is he as president of the United States doing everything he can to protect beaches and clean up the situation, even if he can't shut off the oil pipe down below the ocean.

It's not clear to me that he is. It's not clear to me he is doing what Governor Jindal wants. You know, I think that is the real question.

KRAUTHAMMER: Look, I think he is largely helpless. On the spill itself, he's entirely helpless. I think there has been a lot of inefficiency on the part of the federal government. But it happens in every disaster. It happened in Katrina. The federal government is not all-powerful or all-efficient. There are things that Jindal wants which are hard to do. And it's true, the federal government has delayed the building of the barrier island.

But overall, this is all at the margins. The real issue is at the bottom of the ocean. And my question is why are we at the bottom of the ocean a mile deep? One thing that Obama could do but won't do because he is a liberal is to open up the accessible, easily accessible oil in Alaska and in the Arctic.

The governor of Alaska had an article in The Wall Street Journal today saying we have reserve in Alaska near the Alaska pipeline and feds are shutting, not allowing the retrieval of any oil from there.

BAIER: Log on right now and get ready for another edition of "Special Report" online after the show. Go to the homepage, foxnews.com/specialreport.

Next up, politics, another incumbent goes down, a Republican goes to jail potentially, and the Sestak story won't go away.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

REP. DARRELL ISSA, R-CALIF.: After ten weeks of waiting for an answer and then getting an answer that does not compute, that cannot have been, it's not unreasonable to quickly ask for more information.

(END VIDEO CLIP)

BAIER: Congressman Darrel Issa and others are sending a letter to the White House demanding all records and documents in the Joe Sestak matter.

We have talked about it a lot. Congressman Joe Sestak said he was offered an unpaid job on an advisory board by former President Bill Clinton.

However, there is conflicting information. In the White House letter released Friday Robert Bauer writes: "Efforts were made in June and July of 2009 to determine whether Congressman Sestak would be interested in service on a presidential or other senior executive branch advisory board." Not just one time, it seems more than one time in that memo. We're back with the panel. In addition to that, Charles, there is a question of what board he could have served on. There was talk of an intelligence board, but at least according to that board, you have to be outside of government, couldn't keep his House seat.

KRAUTHAMMER: Well, that is what makes the indifference of the press to what the White House issued last Friday really quite remarkable. This statement is Swiss cheese. It has holes in it all over the place and it doesn't add up.

As you said it says there were efforts made through June and July, and yet Sestak pretends or has said there was one call lasting a minute or less from Bill Clinton.

Well, that can't be June and July. There must have been other offers. Who were they? There is a contradiction there. It's for advisory position we are told. But when Sestak was asked about this originally months ago, his answer was I was offered a job.

He's not a fool. He has been around. He's an admiral. He's been in the House of Representatives. He knows the difference between a job and an appointment on federal advisory commission.

And lastly, as you say, he wasn't even eligible. So we're to believe that a two-month effort to entice him to drop out of the race consisted of a one-minute phone call in which he was offered a job for which he is ineligible and which he says himself is not now a real job.

BAIER: Robert Gibbs —

KRISTOL: I think what Bauer says, the White House counsel says in the statement, and that Sestak chose to stay in the race, said no to the job, and instead chose to stay in the race, that statement almost makes clear that it was a quid pro quo.

It's illegal. I know everyone says it's politics as usual and don't be naive, but it is illegal to offer quid pro quo a federal job for someone to get out of the race. It's not illegal for someone to say are you interested in this job and people can say yes or no. Implicit may be the notion if you take the job you can't run for office especially if it's a real job that you have to quit the House for and can't run for the Senate while you're in.

But it was a quid pro quo, that's even implicit in the White House counsel statement. With Romanoff, the candidate for the primary in Colorado, former state House speaker, I believe, it was reported that he was offered an actual job to get out of the race by White House staffer.

BAIER: And now the press is citing White House officials, administration officials saying a job was dangled in the Romanoff case, but no specifics there.

Mara, it seems like it's building, is it not?

LIASSON: The problem with the whole story it's gone on way too long. I'm —

BAIER: Why isn't Robert Gibbs answering the questions?

LIASSON: Because he's being told not to answer the question.

I think, first of all, I'm perfectly willing to believe there was nothing illegal or unethical about this, that there wasn't an actual quid pro quo which means something specific, it mean if you do this, we'll give you this. Maybe they were exploring his interest in options in case he decided not to run.

But to let it go this long and then to come out with a statement that raises more questions than it answers is not putting an end to this. They need to put a stake through the thing's heart and just answer the questions, what job was he offered, what exactly happened, and then have done with it.

But for months they said nothing inappropriate happened, just trust us, which never works.

BAIER: And now Romanoff —

LIASSON: Now it's a story when it really shouldn't be.

BAIER: Now Romanoff in Colorado is not even talking about whether he was confronted at all. He's not answering any questions. Where does this go?

KRISTOL: My experience in politics is people don't talk about something and put out statements full of Swiss cheese. There is a reason for it. Because if they said the absolute clear true, there would be legal problems or violations by the White House staff. This isn't that they're mishandling it for some mysterious reason. They can't tell the truth.

KRAUTHAMMER: In Colorado, the Denver Post, which broke the story originally, has an editorial today demanding at least that Romanoff say what happened. I love the distinction between "dangling a job" and offering a job. It sounds like he didn't, the offer wasn't inhaled. It was just held out there.

BAIER: I want to talk —

LIASSON: There is a legal difference.

BAIER: I want to talk about another case that developed today. Former chairman of Florida's Republican Party now faces if convicted up to 30 years in prison. Jim Greer arrested this morning, six felonies, including one count of money laundering and four counts of grand theft.

Mara, Charlie Crist, the governor of Florida handpicked him for the job. What about that?

LIASSON: I think in — well, look, there is no primary anymore. If there was a primary it would hurt Charlie Crist even more than he was already being hurt, which is a lot.

In this case, he is the independent. I'm sure that — Charlie Crist can't say anything to tie Greer to Rubio because it's impossible. But certainly, Kendrick Meeks, the Democratic candidate, can say hey Marco Rubio, you were in the Republican party when he was in there and try to tie him to Rubio.

BAIER: There's already a statement out. We'll follow all of these stories.

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